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FizFashizzle posted:Last week I finally set up a roth IRA with Vanguard. I nearly had a panic attack when I put the money into a growth fund. Is this the LifeStrategy Growth fund, or the Growth Index fund? Because the former is a balanced all-in-one fund while the latter is a just a specific subset of the domestic stock market. Also read the Long-Term Investing thread if you haven't already.
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Feb 9, 2014 14:05
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RogueLemming posted:Yep, just call and cancel. They will try and convince you to keep it or get a new card, but just keep saying no. I also request it in writing, because I'm paranoid like that. If I don't see a letter within 2 weeks, I call again. Yep, just call them. I had the exact same thing - credit card that I never used, $50 annual fee, I wanted it gone so I called them to cancel it. First they said they'd remove the annual fee for one year if I didn't cancel the card, and I said I wanted to cancel it anyway. Then they said they'd permanently cancel the annual fee and I said I still want to cancel it. They also offered to lower my interest rate and, if I recall correctly, up my credit limit. Just repeat "I would like to cancel my account" over and over. I cancelled the card because I seriously never used it, but they did make it awfully tempting for me to keep it. My husband and I are paying off his credit card ($500-ish) next week with our tax return and I'm going to try and negotiate the removal of the annual fee and a possible interest rate reduction by threatening to cancel the card. We don't need the card anyway so if we have to cancel it, whatever, we're totally prepared to do that. If they work with us, we'll keep it. I expect they will work with us since the card has been opened for 3-4 years, no missed payments, and they've made a bit of money off us in interest and probably don't want to lose us as a customer.
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Feb 9, 2014 23:24
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So I've got some questions, I'm a little overwhelmed by the options available for giving your money to strangers. I'm married, and currently have about $10,000 in the bank with no debt(No CC's had one in the past though). I also have about $3,100 in a tax deferred retirement fund, but I can't contribute to it any more. So my question now is what should I do? I have about $4,000-5,000 that I'm willing to invest right now. I was thinking about possibly splitting it 3/1 and opening a Roth IRA, then putting $1,000(maybe $2,000) in some sort of mutual fund(Don't know if I want indexed or managed). What does that sound like to ya'll? I was also thinking about opening up some sort of travel rewards CC.
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Feb 10, 2014 04:00
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Emergency saving fund, 401k up to match (sounds like you don't have this), Roth IRA, 401k. Of course you don't want managed funds. Did you read the OP? My guess is you don't even have enough to invest. 10k for two people isn't even a full 6-month emergency fund unless you live like paupers or have a safe fallback method. Store it all in an emergency fund up to 6 months expenses and then come back 
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Feb 10, 2014 04:19
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Open a Roth IRA, put in the max investment for 2013 before April 15th ($5500?). Invest in index funds through the IRA. Continue to add throughout 2014 and beyond. You don't need to split it because you invest in an IRA, so those aren't separate. And I'm not sure what a CC would have to do with anything, unless you mean you're going to buy stuff and pay it off with the money to get rewards. That's a bad idea.
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Feb 10, 2014 04:20
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I also have a guaranteed income of $1,000 a month, so the emergency fund isn't as crucial to me. And the CC was just an offhanded remark. Also, why aren't you advising that I get a shorter term, more liquid investment going?
Big_Gulps_Huh fucked around with this message at 04:28 on Feb 10, 2014 |
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Feb 10, 2014 04:23
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RogueLemming posted:And I'm not sure what a CC would have to do with anything, unless you mean you're going to buy stuff and pay it off with the money to get rewards. That's a bad idea. If you're not worried about an e-fund, yeah, I agree. Roth for 2013, do it before April.
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Feb 10, 2014 04:25
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I mean I definitely don't have a problem with excessive spending, I was just mentioning the CC to see if anyone had any input.
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Feb 10, 2014 04:26
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I have a Roth IRA open at my credit union, and its annual return is 1.5%. Can I do better by moving that money to an IRA managed elsewhere?
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Feb 10, 2014 05:18
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Donald Kimball posted:I have a Roth IRA open at my credit union, and its annual return is 1.5%. Can I do better by moving that money to an IRA managed elsewhere? What is the Roth IRA invested in? If it is a fixed-return (guaranteed 1.5%) then you can "do better" by moving that to a Target Retirement fund at Vanguard - but you will assume more risk in doing so, including the risk of a negative return.
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Feb 10, 2014 05:27
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Donald Kimball posted:I have a Roth IRA open at my credit union, and its annual return is 1.5%. Can I do better by moving that money to an IRA managed elsewhere? Before you do all the research needed, open the account at Vanguard today, link it to your checking account. Put in the request with your credit union to cash out the Roth and do a transfer to another institution. The Vanguard funding pages will tell you how to have the check made out to keep it all IRS-compliant, something like "Vanguard, FBO <your name>". That's the slowest part of the process. While things are transferring, you can do some more research and settle on a fund/portfolio. Ask for more info in the long term investing thread. HoogieChooChoo posted:So I've got some questions, I'm a little overwhelmed by the options available for giving your money to strangers. I'm married, and currently have about $10,000 in the bank with no debt(No CC's had one in the past though). If you decide to invest ~$4k, I would consider putting it all toward retirement, within a Roth IRA held at Vanguard. Look at a Target date fund, or do some research and manually invest it via ETF's or other index and mutual funds. Regarding the $3,100 - Can you roll the $3,100 into a Roth IRA? I would look into that. You'll be able to add more money to the same pool which will eventually make for lower cost funds. An extra $3,100 to kick start the fund is never bad, either. A rewards card can be a good thing if you are smart with it. It sounds like you don't have issues with spending, so if you got one and used it and paid it off in full always, and didn't spend to the limit but rather your predefined budget... I do not see a problem with that. I make $10-30/mo in balance credit via point rewards with my credit card, and I never incur fees nor does it have an annual fee.
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Feb 10, 2014 05:46
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HoogieChooChoo posted:I also have a guaranteed income of $1,000 a month, so the emergency fund isn't as crucial to me. And the CC was just an offhanded remark. Also, why aren't you advising that I get a shorter term, more liquid investment going? "Guaranteed" could mean different things; I'm not sure what it means in your case. Plenty of people think their jobs are guaranteed, but are wrong. As for where to stash the money: 1st priority, whatever level of emergency fund works for you. Cash in a savings account or something. 2nd, money for retirement in an IRA or 401k or whatnot. 3rd, savings for anything else you want to spend money on - cars, weddings, whatever. This should be in cash for anything you'll be spending in the next year or three. If you're going to hold it for longer, like 5-20 years ( you want it somewhere between now and retirement) you can pick something that's riskier but more likely to outperform inflation. Just one of the basic index funds could be good for that, like Vanguard's LifeStrategy funds that I harp on all the time. A lot of people don't take care of 1 and 2 so that's why people are focusing on those.
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Feb 10, 2014 05:47
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Donald Kimball posted:I have a Roth IRA open at my credit union, and its annual return is 1.5%. Can I do better by moving that money to an IRA managed elsewhere? I recently saw a credit union advertising something similar and saying it was a great deal. Can someone explain this to me? The S&P 500 has gained around 30% in the last year, so 1.5% seems like theft, no matter how little "risk" there is (and blatantly ignoring the risk of inflation being higher than 1.5%...which it should be). Even my bond fund, which I'm beginning to think is sub-par, returned ~2.5% in dividends. I just don't understand how credit unions that are supposedly working for their members can offer that return with a straight face.
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Feb 10, 2014 05:49
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You can't compare a risk-free offering with the much higher risk stocks and bonds, that doesn't make sense. What is the actual instrument? I do think it's ridiculous for anyone under 60 to put all their retirement money in a 1.5% anything, even if it is risk free. But different people have different feelings about risk.
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Feb 10, 2014 05:55
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slap me silly posted:You can't compare a risk-free offering with the much higher risk stocks and bonds, that doesn't make sense. What is the actual instrument? But it's not risk-free. It's a set return, but like I tried to say, it's still at risk to lose value if it falls below inflation. From some quick googling, monthly inflation averaged 1.6% over 2013. So it lost value. I'm still not sure how credit unions consider this a beneficial service. [edit: I guess my point is that they seem to advertise to people based on confused perceptions of risk vs. volatility. It's less volatile, but still carries risk. So how do they justify the low return and still say they act in the best interest of their members?] RogueLemming fucked around with this message at 06:11 on Feb 10, 2014 |
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Feb 10, 2014 06:08
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Still, different people want different things. If someone wants a fixed rate of return and is willing to take the inflationary risk to get it, why shouldn't the credit union offer it? Yes this is the money-in-the-mattress type of person we're talking about but even that kind of IRA would be far better than none at all. There's no reason to assume this is some evil scheme. It's more likely an effort to get CU members who are afraid of the stock market to save for retirement. And as you pointed out, it's keeping up with inflation right now anyway.
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Feb 10, 2014 06:20
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SiGmA_X posted:Words I never thought about it before but I just looked into it and I can roll my other fund into an IRA, but it's a thrift savings plan(currently in a target fund) so I don't think it charges me any fees either way? Would it still be beneficial to roll them together? And yeah, I guess I'll just throw the ~$4k in the Roth and call it a day. Thanks for the help, by the way! slap me silly posted:Words
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Feb 10, 2014 07:10
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HoogieChooChoo posted:I mean I definitely don't have a problem with excessive spending, I was just mentioning the CC to see if anyone had any input.
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Feb 10, 2014 07:34
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I have a smallish amount of money (not sure of the exact balance, but more than $5.5k, less than $11k) in a regular, non-tax advantaged account that was a gift. I'd like to add that to my own IRA accounts at vanguard before April, so I can roll it all over at once, since it's definitely more than 1 year's contribution max. I have both a Roth IRA and a rollover IRA already established there. Since this money has already been taxed, I could roll it directly into a Roth, correct? Would I want to do that? If I understand correctly, rolling it in to a traditional IRA would allow me to deduct that income, correct? Lastly, as an option I just thought of now, I have scarily close to $40k in government student loans, mostly at 6.8%. I think I can pay them off in 3 years without this money, and it seems like a bad idea to pay off loans with retirement money, even if that money isn't actually in a retirement account. I suppose the decision is pretty highly dependent on my situation, so I'll summarize. I have been at my first decently paying job for ~6 months, with good prospects for future employment/raises (not included in my payoff calculations). My understanding of Roth vs traditional is that if I put it in a traditional account, I could deduct that income. However, my 2013 taxable income was already very low (~$7k), because of only working part of the year, combined with student expenses/tax credits, and other deductions/credits. I'm not crazy ballin', but my taxable income will be much higher in 2014, and likely higher again in 2015. I was not able to save/invest much while I was in school, but now I intend to save at least $20k a year, after taxes. MMM-style early retirement is very attractive to me, so I might need some way of accessing retirement funds in 15 years or so, when I will be well under 65. TL;DR: I guess typing this out has mostly worked out what to do, so I'm primarily asking to verify my assumptions (If I can invest this money, tax/penalty free in a Roth, or IRA would lower my taxable income). Unless someone has a reason this is a terrible idea, I'll probably put $5.5k in a Roth now for the 2013 contribution, then the remainder to either student loans, or Roth (or maybe a traditional to lower my 2014 taxes, but I have a 401k, so this seems redundant).
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Feb 10, 2014 13:57
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Grumpwagon posted:I have a smallish amount of money (not sure of the exact balance, but more than $5.5k, less than $11k) in a regular, non-tax advantaged account that was a gift. I'd like to add that to my own IRA accounts at vanguard before April, so I can roll it all over at once, since it's definitely more than 1 year's contribution max. I have both a Roth IRA and a rollover IRA already established there. Your money in a normal brokerage account is no different than if you had cash and the same restrictions apply to it. You can use it to contribute up to the maximum, $5.5k, to either an IRA or a Roth IRA. The difference, as I think you understand, is that for the Roth you pay taxes on your contributions, but not on the withdrawal and vice versa for a normal IRA. If you expect to move to a higher tax bracket when you retire then the Roth is generally recommended.
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Feb 10, 2014 16:26
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So, my financial situation has changed a bit, and I'm wondering what the best way to go from here is:quote:Savings: $2000 The reason I'm asking advice is that I have a pending check for $25,000 and I'm wondering what the best way to proceed is. The temptation to knock out my car payment is strong, of course. A security blanket of multiple months of expenses in my account isn't bad either.
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Feb 10, 2014 19:24
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You have enough to wipe out the car loan, increase savings to 8k or whatever you want to be 6 months, start a maxed Roth IRA, and...have a higher emergency fund, increase 401k contributions (above match, I mean), throw into some non-retirement account on vanguard, have a party, save for a down payment on a house.
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Feb 10, 2014 19:30
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Deviant posted:The reason I'm asking advice is that I have a pending check for $25,000 and I'm wondering what the best way to proceed is. Lucky for you, you don't need to decide because you can do it all!
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Feb 10, 2014 19:38
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25000 -5500 (Roth IRA) -9000 (Car) = 9500 9500 + 2000 = 11500 11500 / 2400 = almost 5 months income. Congratulations. Your emergency fund is complete. Continue to budget that car payment money for your next year's Roth IRA contribution (which won't be maxed at just 370/mo) and think about increasing that portion so you CAN max your Roth IRA in a year (459/mo). The rest is for hookers and blow (and food... if you get around to it between the hookers and the blow).
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Feb 10, 2014 19:55
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totalnewbie posted:25000 Now, if I put the 5500 into an IRA before April 15, will that affect my taxes from 2013? I've already filed, so I'd have to make an amended return.
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Feb 10, 2014 21:15
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Traditional, maybe. Roth, no.
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Feb 10, 2014 21:19
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Dead Pressed posted:Traditional, maybe. Roth, no. Roth no unless you qualify for the Retirement Savings Credit (if your income is below a certain amount)
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Feb 10, 2014 23:49
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kaishek posted:Roth no unless you qualify for the Retirement Savings Credit (if your income is below a certain amount)
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Feb 11, 2014 05:34
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This might be better for the tax thread or the long term investment thread, but I'm not sure which, so I'll start here. I'd like to open an IRA for a family member (not a spouse/child), and provide the money to get to the minimum amount for the funds ($1500). I understand that I can gift someone that money without tax implications. But I'd like this to count as an IRA contribution for them, and not me. For simplicity, I'd like to not be on the account at all, but that isn't super important. If I call up Vanguard or whoever with the person's info/SSN, is this something that can be done, or am I going to have to get them more involved? Somewhat related: I've been told my job keeps track of my 401(k) contributions and will stop taking money if it will cause me to go over the yearly max. Are they just keeping track of my contributions directly, or is there somewhere I could look up my contributed amount for the year? How does that work in the (admittedly rare) situation where someone works 2 jobs with 401(k)s (or less rare, contributes to 2 IRAs with 2 different brokerages)? My guess is that you just keep track of it, but I'm curious if there's a way for your brokerage to know. Before anyone asks, I'm aware there are tax implications for over contributions, and I'm not planning on doing it, just curious.
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Feb 12, 2014 17:02
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Hi everyone! I am finally financially stable enough after having paid some immediate loans to people, and am ready to start paying off my credit card debt (7800) @ 16%. Long story short, since getting a huge promotion I've paid off over 3k in debts to friends and family for loans I had to take during my unemployment over a 3 month period, and want to keep the trend going of paying off debt. Thing is though I don't have any savings. What is the recommend amount of bare bones savings I should get before starting to tackle my CC debt heavily? If poo poo super hit the fan I could get my expenses down to about 900 a month. Can I get away with saving a grand and then aggressively tackle this CC to a certain amount, then go back to replenishing my savings, or should I save up to a certain point, or just flat out disregard cash savings and pay off this dumb CC. Also expected to get back around 1.1k in tax return money. I filed the return for that much either way. I know I shouldn't count it straight out, but it's a nice bonus I want to put either into CC or savings.
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Feb 12, 2014 21:25
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At least keep $1000 in savings. Whether you should keep more than that depends on your other resources (family to bail you out if poo poo happens?) and your tolerance for taking a risk of needing more cash than you have over the next 6 months, or however long it takes to pay off the card.
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Feb 12, 2014 21:52
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slap me silly posted:At least keep $1000 in savings. Whether you should keep more than that depends on your other resources (family to bail you out if poo poo happens?) and your tolerance for taking a risk of needing more cash than you have over the next 6 months, or however long it takes to pay off the card. I just got done paying off my family bailing me out money, so I do have somewhat of a net I could fall back on if poo poo really really really hit the fan, but I'm largely more concerned about bringing down debt over that. My ideal plan would be to put equal amount into CC and savings until my savings hits the bare minimum ($1000) amount to be reasonable with. If this is a good plan awesome and if not tell me why so I can adjust accordingly.
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Feb 12, 2014 22:23
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It's fine. How much extra do you have per month? It probably wouldn't make any practical difference if you just got the savings to $1000 first, if that's more comfortable.
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Feb 12, 2014 22:39
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Grumpwagon posted:This might be better for the tax thread or the long term investment thread, but I'm not sure which, so I'll start here. First, they need to have earned income, or their spouse does if the file jointly. I don't think you're going to have much luck putting the money in on their behalf - you'll want to give the money to them and have them invest it. It's certainly the most hassle-free way of doing this. Is there some reason you don't want to just do that? quote:I've been told my job keeps track of my 401(k) contributions and will stop taking money if it will cause me to go over the yearly max. Are they just keeping track of my contributions directly, or is there somewhere I could look up my contributed amount for the year? How does that work in the (admittedly rare) situation where someone works 2 jobs with 401(k)s (or less rare, contributes to 2 IRAs with 2 different brokerages)? My guess is that you just keep track of it, but I'm curious if there's a way for your brokerage to know. Before anyone asks, I'm aware there are tax implications for over contributions, and I'm not planning on doing it, just curious. It should be on your paystub. When you have two jobs, you go over the limit and you have to ask one of them to give the excess contributions back and you will pay additional taxes on the earnings. If you don't take out the contributions, you'll pay full taxes on them, and then pay taxes on them again when you eventually withdraw them so it's a really bad idea.
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Feb 12, 2014 23:18
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slap me silly posted:It's fine. How much extra do you have per month? It probably wouldn't make any practical difference if you just got the savings to $1000 first, if that's more comfortable. I've been able to pay off about 1000 dollars a month back since having this new position, so I think I can keep up that same pace. I hope so anyway! I haven't sat down and done my budget yet for this paycheck.
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Feb 12, 2014 23:57
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baquerd posted:First, they need to have earned income, or their spouse does if the file jointly. I don't think you're going to have much luck putting the money in on their behalf - you'll want to give the money to them and have them invest it. It's certainly the most hassle-free way of doing this. Is there some reason you don't want to just do that? It's a gift, just hoping to keep it a surprise. Oh well, not a big deal. Thanks for the advice!
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Feb 13, 2014 01:13
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slap me silly posted:It's fine. How much extra do you have per month? It probably wouldn't make any practical difference if you just got the savings to $1000 first, if that's more comfortable. I just did my budget and I have all my bills paid off this month and a put 200 into the credit card payment, which is a 100 over the minimum payment. I budgeted my discretionary spending high though this paycheck ($300), but I do think some of this money will carry over into the next pay period. I guess I'll find out. I'll go and try to get to be one month ahead in my YNAB budget, and once I hit that specific point of being a month ahead I'll go ahead and start dumping money into that Credit Card. Thanks for the help.
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Feb 13, 2014 01:22
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Veskit posted:I just did my budget and I have all my bills paid off this month and a put 200 into the credit card payment, which is a 100 over the minimum payment. I budgeted my discretionary spending high though this paycheck ($300), but I do think some of this money will carry over into the next pay period. I guess I'll find out. I'll go and try to get to be one month ahead in my YNAB budget, and once I hit that specific point of being a month ahead I'll go ahead and start dumping money into that Credit Card. Thanks for the help. If you're paying interest on that card, I'd personally prioritize paying off the card asap while building a more feasible buffer (2 weeks ahead?)
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Feb 13, 2014 01:31
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Shadowhand00 posted:If you're paying interest on that card, I'd personally prioritize paying off the card asap while building a more feasible buffer (2 weeks ahead?) Yeah.... It's a bad amount of interest too, but I constantly hear about the 3 month buffer for your bills and such, and I thought a month was a good compromise for trying to pay off debt. Here I'll just show what I'm working with  Just for reference, I covered rent before I started using Ynab so it's not listed yet. So I did all this budgeted stuff, so everything except groceries, (I buy groceries for 2), and maybe booze/restaurants are covered for this month, and I plan on using my next paycheck to budget next month's expenses, then start powering through my CC debt. OR I can just keep up with my monthly expenses, live paycheck to paycheck and then get through this dumb CC debt faster. Like I said, I've heard such a wide range of advice I don't know what is considered a good way to do it. Also to go into more explanation, I don't have a car, but my girlfriend does and I help out with gas. My student loan payments are deferred until August, and those I will only make minimums on because I only have like 10k debt and they're all subsidized so I've been putting off paying those as long as I could until I had a permanent position. Gas/electric are super high right now because I was a month behind on them (not late though) and I just wanted to be caught up 100% on those, so those will also go down in price. Veskit fucked around with this message at 02:35 on Feb 13, 2014 |
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Feb 13, 2014 02:32
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Veskit posted:I just did my budget and I have all my bills paid off this month and a put 200 into the credit card payment, which is a 100 over the minimum payment. I budgeted my discretionary spending high though this paycheck ($300), but I do think some of this money will carry over into the next pay period. I guess I'll find out. I'll go and try to get to be one month ahead in my YNAB budget, and once I hit that specific point of being a month ahead I'll go ahead and start dumping money into that Credit Card. Thanks for the help. Grumpwagon posted:It's a gift, just hoping to keep it a surprise. Oh well, not a big deal.
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Feb 13, 2014 03:04
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